statement: Somebody named Bballs re-quoted the Letter of Intent by Shabibi in an address to the IMFon 3/3/11
This is pretty clear "revalue the remaining foreigncurrency" "Diversify currency composition" & "removeexchange restrictions"
Revalue the remaining foreign currency denominated balance sheet items!
COMPONENTS/RESTRUCTURING TO RV
I have reviewed in some detail the requisite criteria for the restructuring and implementation of the Central government investmentaccounts under the PFM Public Financial management System as mandated by the MOF and coordinated with the IMF & WorldBank. The process is somewhat skewed given that the plan methodology is integrated with the Iraq 2011 Budget which as we allknow has fluctuated pro forma income and production projections with the contributory oil pricing variable. With these in mind,one should also bear in mind that the Iraq economic policy has experienced delays in their capital budget primarily due to the political uncertainties as noted in the IMF report (noted below).The key components of production increases, pricing and large investments in the oil infrastructure have reduced the 2011 budgetdeficit while allowing for an increase in more transparent government finance activities. This trend toward a surplus position in thefollowing years is realistic and will put government finances on a sustainable footing to help rebuild the government’s financials.I believe that the revaluation we are looking for is more than clearly defined and outlined in the letter of intent to the IMF: “
Iraq:Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding”
remove the identified exchange restrictions on current international transactions.
2. In this regard, we formed a Bank Reconciliation Unit that comprises technical level staff from the banks, the CBI and theMinistry of Finance, and with the assistance of Ernst and Young (who were the agents of the Ministry of Finance in the externaldebt restructuring process) to: (i) deal with all legacy external liabilities taking into account the government’s actions in thecontext of Iraq’s external debt restructuring (ii) indentify and propose to write-off non-performing loans to defunct state-ownedenterprises; (iii) propose a course of action for other remaining unreconciled accounts; and (iv) after the balance sheets have beencleaned up,
revalue the remaining foreign currency denominated balance sheet items.
3. The CBI will follow the guidelines to
diversify currency composition
Summarizes & Paraphrases
above article: The article pointed out a couple things that Shabibi wroteto the IMF in an
Iraq Letter of Intent and Memo of Economic and Financial Policies and Technical Memo of Understanding.
This comes straight from Shabibi, she begins to read:…
we have Worked with the IMF staff to complete the exchange laws and regulations and considering measures to remove theidentified exchange restrictions on current international transactions. Then he talks about banks, relative to dealing with externalliabilities, talking about debt restructuring dealing with banks and their external liabilities. Also, the need to identify and proposeto write-off non performing loans to the defunct state owned enterprises, as well as propose a course of action for other remainingnon-reconciled accounts, (so he’s shoring up the banks and reconciling everything in the bank on balance sheets), then he says thatafter that balance sheet cleanup, this is what he wants to do…and he said he will revalue the remaining foreign currencydenominated balance sheet items and the CBI will follow the guidelines to diversify currency composition and establish anappropriate duration and credit risk profile and build a capacity for risk analysis.
: I always thought this was such a huge, huge article, I’m glad it was posted again, because I’ve missedlately some of the impact of what he really wrote. He really felt that the accounts he established for DFIfunds would be safer in the USA; he had kept the Iraqi bank out of the jurisdiction of the GOI. He projectedhis thoughts that the Iraqi GDP would be around 12% for 2011, and what he really, really said …he